Not buying junk food while doing the weekly shopping and forcing an extra trip to the store to acquire it is an example of:
A. how people compensate for time-inconsistent decisions.
B. increasing the cost of a vice.
C. a commitment device.
D. All of these are true.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
One reason why firms replace markets for some activities is that firms
A) reduce the number of transactions required. B) enable individuals to avoid a large portion of their taxes. C) reduce the rate at which the product is wasted. D) do not require team production.
Refer to Table 8-5. The value of each automobile in gross domestic product equals
A) $7,000. B) $15,000. C) $18,000. D) $25,000.
Refer to Table 1-6. What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours?
A) $10 B) $20 C) $30 D) $91.67